Ashford Hospitality Trust - Earnings Call - Q1 2021

Transcript

Speaker 0

Greetings. Welcome to Ashford Hospitality Trust First Quarter twenty twenty one Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.

I will now turn the conference over to Jordan Jennings, Investor Relations for Ashford Hospitality. Thank you. You may begin.

Speaker 1

Good day, everyone, and welcome to today's call conference call to review the results for Ashford Hospitality Trust for the 2021 and to update you on recent developments. On the call today will be Rob Hayes, President and Chief Executive Officer Deric Eubanks, Chief Financial Officer and Jeremy Walter, Chief Operating Officer. The results as well as notice of the accessibility of this conference call on a listen only basis over the Internet were distributed yesterday afternoon in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward looking information and are being made pursuant to the safe harbor provisions of the federal securities regulations. Such forward looking statements are subject to numerous assumptions, uncertainties and known or unknown risks, which could cause actual results to differ materially from those anticipated.

These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward looking statements included in this conference call are only made as of the date of the call, and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form eight ks with the SEC on 05/04/2021, and may also be accessed through the company's website at www.ahtreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compared to 2021 with the 2020.

I will now turn the call over to Rob Hayes. Please go ahead, sir.

Speaker 2

Good morning, and welcome to our call. I'll start by providing an overview of the current environment and how Ashford Trust has been navigating the recovery. After that, Derek will review our financial results, and Jeremy will provide an operational update on the portfolio. First, I'd to highlight some of our recent accomplishments and the main themes for our call. First, we had strong earnings in the first quarter that exceeded both Street estimates and our internal budgets.

We reported positive hotel EBITDA for the quarter for the first time since the 2020. Second, early in the quarter, we secured a $200,000,000 strategic financing with additional future commitments of up to $250,000,000 to provide multiple years of liquidity for the company. Third, we have delevered our balance sheet by over $05,000,000,000 during the past twelve months. And lastly, even with an already attractive loan maturity schedule, we have successfully modified property loan extension tests on two large pools for 2023 and 2024 as well as another large loan pool for 2024 and 2025, making it easy for us or easier for us to qualify for those extension options. This loan modification initiative will continue to be a focus for us going forward.

There have been numerous positive developments for both our company and the hospitality industry over the past few months. We highlighted many of them in an updated investor deck that we put out in early April. We encourage you to review that deck. It is available on our website. As it relates to our liquidity and as we mentioned on our last call, in January, we completed a crucial strategic financing.

We drew $200,000,000 at the closing of the financing and have the option to draw an additional $250,000,000 if needed. At this time, we are hopeful that we may not need to draw any remaining funds from that facility, but that will likely depend on the ongoing strength and trajectory of the industry recovery. Investors should also remember that effectively all of our hotel loans are currently in cash traps, and it may be some time before those loans allow us the ability to pull cash from the properties to corporate. We are optimistic about the long term outlook for the company. And by taking decisive actions to strengthen our balance sheet with the strategic financing and other steps we've taken, we now have multiple years of runway that will allow us to capitalize on the recovery we are seeing in the hospitality industry.

We have significantly reduced our planned spend for capital expenditures this year. However, given the sizable strategic capital expenditures we made in our properties over the past several years, we believe our hotels are in fantastic condition and are well positioned for the industry to rebound. To further improve our liquidity profile, we have suspended both our common and preferred dividends, and Derek will provide more detail around our liquidity outlook. Let me now turn to the operating performance of our hotels. The lodging industry is clearly showing signs of improvement.

We are very encouraged by the development and deployment of vaccines in The U. S. And hope that we will continue to see progress in that front. And while our hotels continue to have negative operating income in January and February, our hotels performed well in March, enough so that Ashford Trust had positive net operating income for the quarter. The second quarter looks to be building upon that strong March as April numbers look likely to exceed March numbers.

So we are confident that the industry recovery is finally taking hold. We believe our geographically diverse portfolio consisting of high quality, well located assets across The U. S. That are approximately 80% reliant on transient demand, we'll be in a position to capitalize on the pent up leisure and building transient corporate demand we are seeing. We continue to be focused on aggressive cost control initiatives, working closely with our property managers to minimize cost structures and maximize liquidity at the hotels.

This is where our relationship with our affiliated property manager, Remington, really sets us apart. Remington was able to quickly cut costs and rapidly adjust to the new operating environment. In the same way that they were hyper responsive on the way down, we expect them to be hyper responsive on the way up, mitigating cost creep as much as possible throughout the recovery. We are

Speaker 3

proud of their efforts over

Speaker 2

the past year and believe this important relationship has enabled outperform the industry from an operations standpoint, and Jeremy will discuss this in more detail. Past twelve months have been extraordinary by any measure, and I cannot be proud of the effort and the performance of our teams during this challenge. Our management team has extensive experience in navigating tough market environments, and we believe we have the right plan in place to capitalize on the recovery as it unfolds. This plan includes continuing to maximize liquidity across the company, optimizing the operating performance of our assets as they recover, delevering the balance sheet over time and looking for opportunities to invest and grow as we bounce off the trough of the industry cycle. We will be laser focused on all of these.

I will now turn the call over to Deric to review our first quarter financial performance.

Speaker 4

Thanks, Rob. For the 2021, we reported a net loss attributable to common stockholders of $91,600,000 or $1.1 per diluted share. For the quarter, we reported AFFO per diluted share of negative $0.30 Adjusted EBITDAre totaled negative $5,200,000 for the quarter. At the end of the first quarter, we had $3,900,000,000 of loans with a blended average interest rate of 4.1%. Our loans were approximately 11 rate and 89 floating rate.

We utilized floating rate debt as we believe it is a better hedge of our operating cash flows. However, we do utilize caps on those floating rate loans to protect the company against significant interest rate increases. Our hotel loans are all non recourse. And as Rob mentioned, nearly all of them are currently in cash traps, meaning that we are currently unable to utilize property level cash for corporate related purposes. As the properties recover and meet the various debt yield or coverage thresholds, we will be able to utilize that cash freely at corporate.

We ended the quarter with cash and cash equivalents of $225,400,000 and restricted cash of $67,700,000 The vast majority of that restricted cash is comprised of lender and manager held reserve accounts. At the end of the quarter, we also had $11,800,000 in due from third party hotel managers. This primarily represents cash held by one of our property managers, which is also available to fund hotel operating costs. We also ended the quarter with net working capital of $223,000,000 compared to net working capital of $9,800,000 at the end of the previous quarter, which highlights the improvement in our liquidity and financial position. From a cash utilization standpoint, our portfolio generated hotel EBITDA of $9,800,000 in the month of March.

Our current monthly run rate for interest expense is approximately $11,400,000 and our current monthly run rate for corporate G and A and advisory expense is approximately $4,000,000 In total, our current monthly cash utilization is approximately 6,000,000 to $7,000,000 a material improvement from our most recent earnings call when we estimated it to be 18,000,000 to $20,000,000 As of 03/31/2020, our portfolio I'm sorry, 03/31/2021, our portfolio consisted of 102 hotels with 22,542 net rooms. Our current share count stands at approximately 146,800,000.0 fully diluted shares outstanding, which is comprised of 144,700,000.0 shares of common stock and 2,100,000.0 OP units. In the first quarter, our weighted average fully diluted share count used to calculate AFFO per share included approximately 14,500,000.0 common shares associated with the exit fee on the strategic financing we completed in January. The exit fee will be owed once the facility is repaid and could be paid in cash or stock. Assuming yesterday's closing stock price of $3.1 our equity market cap is approximately $442,000,000 During the quarter and subsequent to the end of the quarter, we entered into modification agreements on three of our loans.

The three ninety five million dollars JPMorgan eight portfolio loan representing eight hotels, the $419,000,000 MS-seventeen portfolio loan representing 17 hotels and the $240,000,000 Renaissance Nashville West and Princeton portfolio loan representing two hotels. Each of these modification agreements involved us catching up deferred interest in exchange for reducing future debt yield extension tests, thus making it easier for us to qualify for those future extension options. As we previously discussed, we have been actively exchanging our preferred stock for common stock as a way to delever our balance sheet, remove the accrued dividend liability and improve our equity flow. Through these exchanges, we have exchanged approximately 58% of our original preferred stock, approximately $325,000,000 of face value into common stock. These exchanges also eliminated a significant amount of accrued preferred dividends.

After taking into account the $200,000,000 of new corporate debt that we closed on in January, we have lowered our outstanding debt plus preferred equity by over $535,000,000 We have also been opportunistically raising equity capital to shore up our balance sheet. During the 2020 and into the 2021, we issued approximately 10,400,000.0 shares of common stock under an equity line, raising approximately $25,100,000 in proceeds. During the first quarter, we also issued 13,700,000.0 shares of common stock under our Standby Equity Distribution Agreement, or CEDA, for approximately $40,600,000 in proceeds. We recently completed a second equity line, issuing 20,500,000.0 shares of common stock for approximately $43,600,000 in proceeds. In total, we have raised approximately $89,000,000 this year from the sale of our common stock.

In January, we sold a small hotel, the Limeridian in Minneapolis, which provided us $7,300,000 in net proceeds. Over the past several months, we have taken numerous steps to strengthen our financial position and improve our liquidity, and we are pleased with the progress that we've made. While we still have work to do to improve our capital structure, we believe the company is now well positioned to benefit from the improving trends we are seeing in the lodging industry. This concludes our financial review, and I would now like to turn it over to Jeremy to discuss our asset management activities for the quarter.

Speaker 3

Thank you, Derek. Comparable RevPAR for our portfolio decreased 50.9% during the 2021, while hotel EBITDA flow through was a strong 60.8. We are extremely encouraged by the strong signs of the recovery that we are seeing across our portfolio. Occupancy has accelerated through the first quarter with January at 36%, February at 41%, and March at 49%, the highest occupancy we've seen in the past year. We're seeing green shoots across all segments, while leisure continues to lead the way.

March had more new definite group business booked than any other month in the last year. As a result, we expect April occupancy numbers to exceed our strong March numbers. In the past, and especially now during the recovery, we benefited from the diversity of our portfolio. Our select service hotels recovered an incredible 70% of comparable occupancy in the first quarter relative to the comparable 2019 period. Similarly, our full service hotels recovered a solid 52% of comparable occupancy in the first quarter relative to the comparable 2019 period.

We are seeing significant pent up leisure demand in states that are relaxing restrictions. This was particularly evident over spring break at our Florida assets. Our La Concha Key West hotel had first quarter occupancy of 89%. March occupancy was 96% driven by the strength of the spring break period. In fact, that occupancy level is higher than it was in March 2019.

While capitalizing on the strong demand, we were able to increase seasonal premiums on upgraded room types and increase seasonal blackouts to discounted programs, contributing to a black GOP margin of 63% for the first quarter. Another hotel that is experiencing strong performance is the Hilton Santa CruzScotch Valley, which achieved an 18% increase in first quarter occupancy relative to the comparable 2019 period. This performance was largely driven by our ability to secure large group business from fire cleanup crews. In addition to corporate transient business picking up, the hotel is starting to see a promising trend of work from home tech employees leaving their Bay Area homes and working remotely from the hotel. This additional demand resulted in a year over year total revenue increase of 5% during the first quarter.

One of the most encouraging trends that we are seeing across our portfolio is the growing number of hotels that are achieving positive gross operating profit. In the first quarter, more than 70% of our assets had positive GOP, with that number increasing to 84% in March alone. Our team remains laser focused on driving revenue and finding new operational efficiencies. Our asset management team continues to have weekly cash flow calls with the majority of the properties to review payables, labor models, and daily projections. We have more visibility and insight into the day to day operations of our hotels than ever before due to the relationships that we have with our brand partners.

Moving on to capital management. In recent in prior years, we were proactive in renovating our hotels to renew our portfolio. That commitment has now resulted in huge competitive and strategic advantage as the market rebounds. Not only are our properties more attractive to potential travelers, but we can also deploy capital more prudently throughout the recovery. Looking ahead in 2021, we plan to focus on strategically restarting select projects that were put on hold.

To that end, we plan to renovate the ballroom at the Ritz Carlton Atlanta, public space and guest rooms at the Hilton Santa Cruz, guest rooms at the Marriott Fremont, and public space at eight select service assets. Cumulatively, we estimate spending 40 to $50,000,000 in capital expenditures in 2021, which is significantly less than we have spent in previous years. Before moving to q and a, I'd like to reiterate how optimistic we are about the recovery of our industry. With the vaccine rollout in full force, we are seeing the booking window expand, and bookings are now at the highest levels we've seen over the past year. Additionally, we are seeing cancellations in an all time low since the start of the pandemic.

These are all great indicators, and our forward looking pace suggests that these trends will continue in the future. That concludes our prepared remarks. We will now open the call for Q and A.

Speaker 0

Thank Our first question is from Tyler Vittori with Janney Capital Markets. Please proceed.

Speaker 5

Thank you. Good morning. Appreciate all the all the detail thus far. First, a lot of investors focused on the the labor situation out there right now, what that might do to the cost structure, at least in the short term. Can you elaborate a little bit more on the flow through for the quarter, but also talk a little bit more about what you're seeing on the labor front and discuss how you're thinking about the the pace of bringing back more employee employees as occupancy starts to build here?

Speaker 2

Well, I'd say that, you know, from a flow through standpoint, I think we were extremely pleased with with the performance of our asset management team in Remington. I think our flows were over 60% for the quarter. So on the heels of what we were dealing with on the revenue side, I thought those flows were extremely strong and and showed themselves very well relative to the industry. But you're right. We're undoubtedly seeing, some, I guess, some issues at the property level in terms of getting people back to work, and it's obviously not something just that we're seeing, but we're seeing across the industry and across other industries as well.

There's no doubt that the, additional unemployment benefits that go through September are an incentive for people not to come back from furlough or not to come back to to work. And that is a struggle that that, that we're dealing with, and it's something that I think we are trying to communicate with, the HLA and other, people in in DC, letting them know that it is a hindrance right now to getting people back to work as they're just not intended to. So I think we're trying to do things with the operators that we work with at Remington and and the brands are trying to do things to to, you know, have referrals and different signing bonuses and whatnot. And I think we're hopeful that it's a a transitory thing until the fall when some of these benefits burn off. But it's it's no doubt something that that I we think is probably a shorter term issue than maybe a longer term issue.

Jeremy, I don't know if you had any other color.

Speaker 3

Yes. We want to bring people back to work. It's been a huge focus, as Rob mentioned. Our largest management company, Remington, launched what they call the Spring Forward campaign and actually sent corporate, team members to every single one of their properties, to get a pulse on what we're seeing. And, there's no question that we are running very lean, at our assets, and there's a good amount of capacity to add more labor, and that's what we're focused on because we don't want to burn out our teams.

I think that in the short term, we'll still continue to see stronger flows and maybe stronger relative margins just because we can't find the labor that we need. But I do think that's a short term issue, hopefully, but it's going be one that we're going to have to deal with at least through probably September, October time period.

Speaker 5

Okay. Great. And then following up on the operating environment broadly, clearly, positive results and commentary. You know, it's great to hear that that April looks better than March. Can you talk a little bit more about some of the the green shoots that you're seeing out there on, the corporate transient side of things?

Speaker 2

Sure. I think well, there's no doubt that where we're seeing most of the green shoots is is still in leisure. And I think we as we look over the next quarter, I think we are you know, you're seeing probably occupancy gains. Probably, right now, we think

Speaker 3

it's gonna be each month

Speaker 2

of the quarter. So we think April's gonna be more than March, May over April, and June over May. And so that's very exciting because we haven't had that experience in a while. And that's with us trying to push rate back. You know, right now, if you look at the first quarter, our rates were down about 30% to 35% versus 2019, which I think is lower than what we were hoping for some time a few months ago.

But as we're going forward into the rest of the year, I think we're gonna the team here is gonna be really pushing on, on on that rate to see if we can get that, reduction versus 2019 to, materially be reduced. I think on the corporate transient side, it's still, like I said, it's still relatively small, though we have had these gains that are month over month. The real question, obviously, is what is gonna happen, post Labor Day. And, it's just it's hard to say. I think our hope is that psychologically people, as they hit the road this summer, you know, realize that they can travel the airports, go to their hotel rooms, feel safe, have a great experience, and we'll be ready to go for the the second half of the year.

I mean, you're seeing a

Speaker 3

lot of the large companies

Speaker 2

still have travel, kind of travel bans through, June, kind of through the second quarter. Those are gonna start loosening up. I mean, even as, you know, just on my own personal experience, we've now had several different investment groups, investment bankers, brokers are starting to hit the road. We've been visiting with them over the last, you know, several weeks, and it was funny talking to them because they marvel at the greatness of business travel, how great it was to be on the road, to have their own room, to to visiting people. And so even just those sort of little, you know, word-of-mouth things, I think, demonstrate that we're, you know, we're hopeful on what business travel will be the the second half of the year.

Speaker 4

Here here's what's

Speaker 3

going on, Tyler. Probably most people on this call that are listening in, they travel for their own personal reasons. And so we're seeing that happen, that people are traveling. There's a lot of pent up demand in the leisure segment. And as people, do travel more, outside of, of the corporate travel, they're gonna get more comfortable traveling for corporate purposes.

And I think I do think that there is a lot of pent up demand for face to face meetings, to to drive, your business activities. And so, I think it'll be a little bit vast over the summer just because of the seasonality of our portfolio where during the summer months, we tend to have higher leisure, components anyway. And so, I I think that, we'll continue to see it increase every month like we have in the first quarter. And then I do believe that there's gonna be a point in time where it does pop. I just don't know what month that is.

Speaker 5

Okay. Great. And then just the the last question from from me. You know, some moving pieces here on the, the balance sheet side of things. Obviously, you made a lot of progress.

Help us think more about your your leverage, how it might evolve over time, both the rest of this year and then looking a little bit farther out. And also help us think about when you might shift gears from, the focus on the balance sheet and lower leverage, perhaps, looking to take advantage of some of the dislocation out there and and capitalize on on some of the opportunities as the recovery plays out?

Speaker 2

Sure. So to your to kind of

Speaker 4

the first part of the

Speaker 2

question is we do feel strongly that that the our leverage level needs to come down over time. I spent quite a bit of time earlier this year having calls with both, you know, you all on the buy side, investors on the sell side, investment bankers, other industry participants to get a a sense and feel for what they thought we could do better, what we could improve on. And one of the comments that came back pretty consistently was to improve the leverage profile of the company. That's something that's going to take years. That's not going to happen over the short term.

So we have that perspective where right now, it's going to take a little bit of time to get there. At the same time, there is some tension that exists because what was a liability and has been a liability for us from a balance sheet perspective is also, in some sense, a great asset. As you're going into a recovery, having the leverage that we have in our properties, which is not replicable, I mean, both from a rate perspective and LTV perspective, that is something that is a benefit to us as we accelerate into this recovery. And so that is something that can benefit shareholders as EBITDA comes back. But it is something that we're going to have to chip away over time.

And I think realistically, it won't be we won't be able to address some of the leverage levels in earnest until we have probably paid off our friends over at Oaktree and and with the strategic financing that we have. And then as we get into loan extensions that are occurring in 2023, 2024, that will be the moment where it'll give us the ability to potentially pay off or pay down some loans, reorganize them so they make a little bit more coherent sense in terms of what we're trying to do long term. So so right now, we're we've been focused on opportunistically handing back assets that we felt were uneconomic. We think, by and large, that process is done. I wouldn't expect as of now to have hand back anything else that's material to the platform.

We've been focused on converting these preferreds to common. We think that's helpful in terms of both removing the preferreds that are are senior to our common shareholders, removing those building, accruals, and providing significant more equity float. That was a struggle that we had, we think, in previous cycles was our equity float was too small. This is another way to to help solve that. And so I think you're gonna see it'll be a a chipping away over time as we address leverage.

Speaker 5

Okay. That that's all for me. Thank you for the detail.

Speaker 0

Our next question is from Brian Maher with B. Riley Securities. Please proceed.

Speaker 6

Good morning, or I should say good afternoon, and thanks for those comments thus far. Kind of sticking with the preferred to common exchanges, is is the goal there to ultimately eliminate the preferreds? I mean, we were a bit surprised to see that continue on at a and at a higher ratio kind of post the Oaktree transaction. Can you elaborate a little bit more on what you do with the balance of the preferreds and and over what period of time?

Speaker 2

Sure. I think in the ideal world, Brian, I would like to get rid of all the preferreds. I think it simplifies our capital structure. It removes fixed charges, which I think as we are looking at our total leverage on a go forward basis, I am one, and this is probably maybe a little difference between me and and Doug, was that I I do see preferreds as a more levered type structure. And so those are ones what I'm looking at are leverage levels.

I kinda look at debt to preferred EBITDA. So I would like to remove them over time. Several of the several of those series are callable. They have, you know, five year non calls. They I think about three to five series are will be callable by the end of this year, and then the last ones will be by the end of next year.

So I think the our game plan is to continue to do these exchanges as we can strategically strategically if if they they make make sense, sense, to reduce them, reduce those accruals. And then depending upon how the industry recovers, we'll see over time if we wanna either tender or or or call them. That's obviously a a TBD is what happens over the next, you know, couple years in in recovery.

Speaker 6

Got it. And then just on the cash trap conversation, I get it that the cash needs to stay, you know, at the hotel level, But I am assuming that the cash that's generated from the properties can go towards the debt to service those properties. Is that correct?

Speaker 2

That is correct.

Speaker 6

Okay. That's correct. And most

Speaker 2

and most and most of the loans, Brian, are they usually have tests that are somewhere around usually kind of 1.2 type, you know, coverage ratios or kind of each loan's a little bit different, but it's kind of a probably decent estimate of of when those loans would actually be able and it's usually over several months. So it's usually not a onetime test. It's over a, you know, rolling three months or over a quarter before you can actually extract those extract that cash. But, yes, you can use it for interest. But the problem is you may have certain assets that are covering their own pool because they're, say, in Florida or Texas or certain geographies or more transient.

And then you have other assets like assets in Boston or San Francisco or whatever that are more urban that aren't able to, but you can't transfer the cash over. And so it it, it obviously makes it so that you've got additional cash needs coming from corporate that, you know, that we can't address quite yet.

Speaker 6

Got it. And with all the discussion and concern about, inflation possibly, you know, rearing its head here this year. And I understand, you know, having covered the company for eighteen years, the goal of kind of having more floating because you can kind of move RevPAR. The RevPAR would tend to move higher as things get better, etcetera. But given where we're at with interest rates currently and with the outlook for potential inflation, you know, is there an opportunity or desire to shift a little bit more to fixed, from floating at this point?

Speaker 2

That's a good question. I mean, it's something that we we obviously look at and are open to. But as we've gone through numerous cycles and looked through analyses on would you have been better swapping from floating to fixed, the amount of time that that actually made sense and paid off over the next five years or over the next term of your debt, it's very, very rare. And so so we try to address that by putting caps in place, which we have on all of our our floating rate debt to protect against any sort of hyperinflationary sort of scenario. But by and large, as you know, Brian, inflation would be outstanding for us.

I mean, that would be one of the best things that ever happened to us. Because, when you look back even back to the seventies, when you had hyperinflation scenarios, hotel rates kept kept pace and actually exceeded the increases in interest rates. And so and and, honestly, us as a company that has higher leverage than we'd like to have over time, that is a way to very quickly delever is to have your EBITDA and revenues grow at rapid rates. So I think inflation is welcome from our perspective.

Speaker 4

Yes. Brian, this is Derek. The other thing I would add to that is that not only do we believe that floating rate provides a natural hedge to our cash flows, but it also provides more flexibility. Fixed rate debt tends to tie your hands a little bit more, so we put some value on that flexibility. And so as I've looked at the loans that we've done over my eighteen years at Ashford, I've never done a floating rate loan that I regretted doing.

But almost every time we've done a fixed rate loan, I look back and wish we had done floating. And we may be at this unique time where rates do go up from here, would have been better locking it in, which is something we're talking about. But we also value that flexibility that we have. And so that's something else that we take into account when we're thinking about these decisions.

Speaker 6

Great. And just last for me. You know, the Reddit crowd, I'm sure you've noticed, has kinda latched on to the Ashford Trust name. You know, what's the best way to kind of take advantage of that, exposure maybe or, enthusiasm for for lack of a better term? Is it through, you know, issuing through the CEDA or other ways?

I guess you can't do the ATM right now, when you have rallies in the stock, you know, to kinda hit that bid? And and and how quickly can you move on that?

Speaker 2

Yeah. It's a good question. I mean, we we actually have gotten some traction with retail shareholders. There's a lot of benefits that come from that. I mean, obviously, our trading volume has been significantly improved by the, I said, attention from the retail crowd.

That, I think, is could be a great benefit to our shareholders over time to be able to build positions and get out of positions as needed. They also undoubtedly bring a certain amount of enthusiasm that's enjoyable to kind of be around. And I think if you go through a lot of what is being said, I think there's a lot of them that have the right perspective, which is over the medium or longer term that there's a reopening play that they're they're that trying to participate in. I mean, there's always gonna be some shareholders that are just in and out for a short period of time. And, again, that can at least accentuate volume.

But, I think the ones that that really are doing their due diligence and doing their work are looking at the longer reopening play, here and how Ashford Trust coming from a pretty difficult spot as we've been. It is a real opportunity to to participate in that. You know, how how do you, take advantage of it? There's obviously a lot of things that can happen. And I think the decisions that we'll make will be not dependent really upon the nature of our shareholder base, but what happens to our share price and what happens to the industry recovery, that's going to be the basis for us making decisions, not who our shareholder base is at any one moment.

Speaker 6

Got it. Thanks for the color.

Speaker 0

Our next question is from Chris Wanerongka with Deutsche Bank. Please proceed.

Speaker 7

Hey. Good morning, guys. I think the original CEDA agreement maybe expires really soon, and I and I was curious as to whether you have any other kind of ATM or other equity issuance programs kind of in effect for the rest of this quarter right now.

Speaker 4

Chris, it's Derek. So just to be clear, the CETA that we put in place, we have exhausted, and we have raised the equity that was allocated for that CETA. We did have a second equity line that was put in place, which has also been exhausted. So I don't think we're ready to provide any comments in terms of what we could do next or what might happen from here. But I just want to be clear that everything that we have put out there at this point has been exhausted from an equity raising standpoint.

Speaker 7

Okay. Thanks, Derek. And I think as of March 31, the preferred balance was around $272,000,000 Is that can we assume it's still around there?

Speaker 4

We continue to be active and opportunistic on exchanging the preferred for common. So we'll just we'll point you to the public comments that we've made. But as Rob said, as long as it makes sense and we're able to exchange those preferred at a ratio that we believe works for our common shareholders and is less than the par amount owed, then that's something that's a strategic initiative for us.

Speaker 7

Okay. That's fine. And then just kind of a housekeeping. Is it possible to get a pro form a twenty nineteen EBITDA that reflects the asset sales or givebacks you guys have done to date? And I guess, where you think corporate run rate SG and A and advisory fees are?

Can we get a ballpark number for that?

Speaker 4

We can talk about providing the twenty nineteen pro form a hotel EBITDA, which I'm not sure if that was in our deck that we published in April or not, but it does probably make sense to refresh that number. In terms of run rate for corporate costs, I mean, that's something that we have provided, and I provided in my prepared remarks that from a corporate G and A and advisory standpoint, we believe the current run rate is about $4,000,000 a month. And for interest expense, currently, it's about $11,400,000 a month run rate.

Speaker 7

Okay. Very good. Thank you. Chris, just to

Speaker 4

be clear, that corporate G and A number I gave you includes base advisory fees.

Speaker 7

Right. Right. Okay. Gotcha. Thanks, Derek.

Speaker 0

We have reached the end of our question and answer session. I would like to turn the conference back over to management for closing remarks.

Speaker 2

All right. Thank you, everyone, for joining today's call. We look forward to speaking with you in the next quarter.

Speaker 0

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.